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Abstract
In Sweeney v Boylan Nominees Pty Ltd the High Court affirmed that a principal
is not vicariously liable for the negligent acts of an independent contractor. In this
case a mechanic engaged by Boylan negligently performed repair work, resulting
in an injury to Mrs Sweeney. Since the mechanic was a contractor rather than an
employee, Mrs Sweeney was unsuccessful in her action against Boylan. While the
majority refused to extend the principles of vicarious liability, in a dissenting
judgment Kirby J would have allowed Mrs Sweeney to recover from Boylan
based on the fact that the mechanic was a ‘representative agent’ of Boylan. This
article examines the High Court’s reasoning in this case, with a particular focus
on the difficulties involved in using agency-based arguments to extend the scope
of vicarious liability and the central importance of the employee-independent
contractor dichotomy in this area of law. In light of the majority’s unwillingness
to extend the scope of vicarious liability by using agency concepts or through a
more general revision of the distinction between employees and independent
contractors, this article argues that the law should take a broad and flexible
approach when classifying workers as employees (or independent contractors).
Employers should not be able to avoid liability unreasonably for the negligent
acts performed by those they engage to perform work.
1. Introduction
It is a longstanding principle of the common law that an employer will be
vicariously liable for the tortious acts of an employee but not for the acts of an
independent contractor.1 This seemingly simple and longstanding distinction
disguises the difficult questions of principle and policy which bedevil this area of
law. As traditional patterns of work change, it appears to be increasingly difficult
to maintain a bright line distinction between employees and independent
contractors. A growing number of workers seem to occupy positions somewhere
between these two established categories. While the number of ‘self-employed
contractors’ has remained relatively steady over the past decade, there has been an
increase in the number of contractors who rely on a single client for work,
1
* Final year student, Faculty of Law, University of Sydney. The author would like to thank David
Rolph for his helpful comments and advice. All opinions, and any errors, are the author’s own.
1 Quarman v Burnett (1840) 151 ER 509 is usually cited as authority for this proposition.
164 SYDNEY LAW REVIEW [VOL 29: 163
Nearly 30 years ago Professor Atiyah marshalled the arguments which would
justify imposing liability on employers for the acts of independent contractors as
well as employees … . The question whether the common law should continue to
draw a distinction between liability for the acts of employees and those of
independent contractors must wait for another day.3
Sweeney v Boylan Nominees Pty Ltd4 provided the High Court with an opportunity
to consider this question.
2. Facts
Mrs Sweeney was injured when a refrigerator door at a service station fell off and
hit her on the head. Earlier in the day on which Mrs Sweeney was injured the
owners of the service station informed Boylan, who owned the refrigerator, that
there was a problem with the door. A mechanic, Mr Comninos, was sent to the
service station to perform repairs. The trial judge found that Mr Comninos failed
to exercise reasonable care and that such negligence was the cause of Mrs
Sweeney’s injuries.5 This finding was not questioned on appeal.
The nature of Boylan’s engagement of Mr Comninos was the central issue of
the case and it is worth examining the particular character of this relationship in
some detail. Boylan had six employees who worked in its service department,
three ‘field service’ employees who performed repairs at the premises of Boylan’s
customers and two ‘contractors’, including Mr Comninos, who performed the
same work as the ‘field service’ employees. The ‘contractors’ were only asked to
work when the ‘field service’ employees were fully occupied, although in practice
Mr Comninos performed work for Boylan on a daily basis.6 Boylan’s service
reports referred to Mr Comninos as ‘our mechanic’ and authorised him to collect
the ‘amount due’ when repairs were completed. Boylan also referred to Mr
Comninos as ‘our mechanic’ in a report to its public liability insurer.7
However, unlike the ‘field service’ employees, Mr Comninos was not required
to accept jobs from Boylan, did not wear a Boylan uniform, was not based on
Boylan’s premises and invoiced Boylan for the hours of work he performed.
Although the evidence on this point was not clear, it also seems that Mr Comninos
would have been entitled to work for an employer other than Boylan.8 In addition,
2 Productivity Commission, The Role of Non-Traditional Work in the Australian Labour Market:
Commission Research Paper (2006) at 23.
3 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 at 366–7 (McHugh J) (footnotes
omitted). See also Kirby J at 392.
4 Sweeney v Boylan Nominees Pty Ltd t/as Quirks Refrigeration (2006) 227 ALR 46 (‘Sweeney’).
5 Id at [5], [43].
6 Id at [56].
7 Id at [7], [56].
2007] CASES AND COMMENTS 165
Mr Comninos had his own trade certificate and contractor’s licence, took out his
own public liability and workers compensation insurance, and drove his own van
displaying his own company name.9
Mrs Sweeney sued the owners of the service station and Boylan. It is not clear
why Mrs Sweeney did not also sue Mr Comninos (or his company).10 According
to the majority of the High Court there was ‘every reason to think’ that the identity
of Mr Comninos, and the fact that Boylan alleged he was an independent
contractor, could have been ascertained before the trial.11 The decision to pursue
a claim only against Boylan and the service station, rather than against Mr
Comninos, ultimately meant that Mrs Sweeney was left without a remedy.
3. Decisional History
In the District Court of New South Wales, Mrs Sweeney failed in her action against
the owners of the service station. This claim was not pursued on appeal. However,
Mrs Sweeney succeeded against Boylan on the basis that it was vicariously liable
for the negligence of Mr Comninos. The trial judge found that the mechanic was
‘acting as a servant or agent of [Boylan] with the authority and the approval of
[Boylan] to undertake the work he did.’12 In reaching this conclusion, the trial
judge placed emphasis on the documents referring to Mr Comninos as ‘our
mechanic’. In argument before the New South Wales Court of Appeal, counsel for
both Mrs Sweeney and Boylan accepted that the trial judge’s decision was
intended to be a finding that Mr Comninos was an employee of Boylan.13
The New South Wales Court of Appeal set aside the decision of the trial judge.
It found that the relationship between Boylan and the mechanic was not one of
employment because:
• Boylan did not exercise control over Mr Comninos;
• there was no ‘mutuality of obligation’ to provide and accept work;
• the work was carried out under Mr Comninos’ own name;
• Mr Comninos provided his own equipment and tools and sometimes bought
his own spare parts;
• Boylan paid Mr Comninos on a piece work basis; and
• Mr Comninos provided his own insurance and superannuation.14
8 Boylan Nominees Pty Ltd t/as Quirks Refrigeration v Sweeney (2005) 148 IR 123 at [37] (Ipp
JA) (‘Boylan’).
9 Sweeney (2006) 227 ALR 46 at [31].
10 Id at [3]. Whether Boylan engaged Mr Comninos or his company was not considered in detail
at any stage of the proceedings: Sweeney (2006) 227 ALR 46 at [31].
11 Sweeney (2006) 227 ALR 46 at [3] (Gleeson CJ, Gummow, Hayne, Heydon & Crennan JJ).
12 Boylan (2005) 148 IR 123 at [25].
13 Id at [25].
14 Id at [55]–[57].
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Furthermore, the New South Wales Court of Appeal found that McHugh J’s
statements in Scott v Davis15 and Hollis v Vabu Pty Ltd16 — that a principal will
be vicariously liable for the acts of an agent in circumstances where the agent acts
as a ‘representative’ — did not presently reflect the law in Australia.17
A majority of the High Court upheld the decision of the New South Wales
Court of Appeal.18 In rejecting the argument that Boylan should be held
vicariously liable, the majority emphasised the central role of the distinction
between employees and independent contractors in determining the bounds of
vicarious liability. However, the significance of the majority’s decision is not its
reaffirmation of this well-established principle, but its rejection of any wider
principle of vicarious liability such as that advocated by McHugh J in earlier
decisions, or by Kirby J in his dissenting judgment.
A. The Majority
The majority emphasised the ‘very different’ circumstances in Sweeney compared
with Hollis.23 In highlighting the differences the majority focused on the
following:
B. Kirby J
It appears the classification of the relationship was not as clear-cut for Kirby J, who
described it as ‘in the borderland between an employment-like relationship and a
wholly independent contract.’33 However, in reaching a conclusion of non-
employment, Kirby J also drew heavily on the factual differences with Hollis. His
Honour emphasised Mr Comninos’ use of his own van, the fact that Boylan did not
provide Mr Comninos with a uniform and Boylan’s relative lack of control over
the way Mr Comninos worked.34
Having determined that Mr Comninos was not an employee of Boylan it
remained for the Court to consider whether there was any basis on which the
principles of vicarious liability could be extended. The main focus of both the
majority and Kirby J was whether the decision in Colonial Mutual Life Assurance
24 Id at [31].
25 Hollis (2001) 207 CLR 21 at [48].
26 Sweeney (2006) 227 ALR 46 at [32].
27 Hollis (2001) 207 CLR 21 at [49].
28 Sweeney (2006) 227 ALR 46 at [32].
29 Hollis (2001) 207 CLR 21at [56].
30 Sweeney (2006) 227 ALR 46 at [32].
31 Id at [32].
32 Hollis (2001) 207 CLR 21 at [52].
33 Sweeney (2006) 227 ALR 46 at [72] (Kirby J).
34 Id at [73].
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A. The Majority
In Sweeney the majority gave an extremely narrow operation to Colonial Mutual
Life, holding that the decision stands only for the proposition that a principal will
be held liable for slanders made by an independent contractor ‘engaged to solicit
the bringing about of legal relations between the principal and third parties’, and
even then only when those slanders are made in order to persuade the third party
to enter legal relations with the principal.39 This interpretation of Colonial Mutual
Life is based on the concept of agency: the insurance salesman was the principal’s
agent (‘properly so called’) and the tortious conduct occurred during the execution
of that agency.40 According to the majority it is the close connection between the
principal’s business and the independent contractor’s conduct as agent which
results in vicarious liability in this case. The majority refused to accept that
Colonial Mutual Life stood for the wider proposition that ‘A is vicariously liable
for the conduct of B if B “represents” A (in the sense of B acting for the benefit or
advantage of A).’41
B. Kirby J
Kirby J was prepared to accept a much wider application for Colonial Mutual Life.
His Honour held that the principle to be derived from Colonial Mutual Life is that
a principal will be vicariously liable for the acts of a ‘representative agent’.
According to Kirby J, the relationship between Boylan and Mr Comninos satisfied
this description:
Kirby J rejected the suggestion that Colonial Mutual Life should be confined to
cases in which the ‘representative’ is authorised to make ‘representations’.
Although conceding that this was the factual situation in Colonial Mutual Life,
Kirby J held there was no reason in either the language of the judgment or the
underlying principle to justify confining the decision in this way. Adopting such a
narrow interpretation would create ‘a very confined and peculiar rule.’43 Kirby J
also rejected Boylan’s argument that applying Colonial Mutual Life in these
circumstances would undermine the rule in Quarman v Burnett44 which states that
a person is generally not liable for the negligence of an independent contractor.
Kirby J pointed to a number of circumstances which indicate that this rule is not
absolute, such as non-delegable duties and torts that do not require proof of fault.45
Finally, Kirby J considered three policy considerations which favoured
allowing recovery in this case:
(1) the need for the principles of vicarious liability to respond to changing social
conditions in which independent contractors are more prevalent, so that those
‘responsible’ for causing injury are held liable;46
(2) the likelihood that the proliferation of independent contractors in the
workplace will lead to increasing situations in which the contractor is either
uninsured or unidentifiable;47 and
(3) the potential to promote ‘greater rationality’ in litigation. If employers are
vicariously liable for independent contractors they have an incentive to
disclose the existence of an independent contractor in any proceedings. If
vicarious liability is not extended it encourages ‘evidentiary ambush.’48
42 Id at [80].
43 Id at [89].
44 Productivity Commission, above n2.
45 Sweeney (2006) 227 ALR 46 at [92].
46 Id at [102]–[105].
47 Id at [106].
48 Id at [107].
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53 Luke McCarthy, ‘Vicarious Liability in the Agency Context’ (2004) 4(2) Queensland
University of Technology Law and Justice Journal 1 at 9–12.
54 P S Atiyah, Vicarious Liability in the Law of Torts (1967) at 99.
55 Hollis (2001) 207 CLR 21 at [65].
56 Gino Dal Pont, ‘Agency: Definitional challenges through the law of tort’ (2003) 11 Torts Law
Journal 68 at 79–80. See also McCarthy, above n53 at 19.
57 Sweeney (2006) 227 ALR 46 at [79].
58 Sweeney v Boylan Nominees Pty Ltd [2006] HCATrans 78 (3 March 2006) at 590.
59 Sweeney (2006) 227 ALR 46 at [13]. See also [29].
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simply that the distinction between employees and independent contractors is ‘too
deeply rooted to be pulled out.’60 In Hollis a majority said that was an ‘unsuitable
case’ in which to address the question reserved by McHugh J in Northern
Sandblasting Pty Ltd v Harris — and quoted in the introduction to this paper —
because there was a full answer to that appeal within current doctrine.61 The same
could hardly be said for Sweeney.
Before considering the employee-independent contractor distinction in more
detail, it is worth making one final point about the ‘representative’ argument. The
majority’s characterisation of Mrs Sweeney’s argument — ‘A is vicariously liable
for the conduct of B if B “represents” A (in the sense of B acting for the benefit or
advantage of A)’62 — suggests that ‘representative’ was a term with little
substantive content. However, Mr Comninos was not just a representative of
Boylan in the sense of acting in its interests, but was a representative in the sense
that Boylan held out Mr Comninos as part of its business.63 In this respect, the
argument in favour of extending vicarious liability to the acts of ‘representatives’
resonates with aspects of the ‘organisation’ test. In light of this it is worth
highlighting a comment made by Kirby J in Sweeney:
Mrs Sweeney did not seek to revive Lord Denning's attempt to explain the ambit
of vicarious liability for persons working for and within the organisation of the
defendant's business. …. This court rejected the organisation test in Stevens.
Whilst there may be more to the notion than some critics have suggested, it was
not revived in argument in this appeal. Any reconsideration of the organisation
test must therefore await another day.64
60 Id at [33].
61 Hollis (2001) 207 CLR 21 at [32].
62 Sweeney (2006) 227 ALR 46 at [29].
63 Id at [99].
64 Id at [61] (footnotes excluded).
65 Id at [33].
2007] CASES AND COMMENTS 173
7. Conclusion
In Sweeney, the High Court reaffirmed the indicia test as the proper way of
distinguishing an employee from an independent contractor, emphasised the
central role of this distinction in determining vicarious liability and confined the
‘exception’ in Colonial Mutual Life to a narrow range of circumstances. However,
the decision is more noteworthy for its failure to consider the broader question of
whether an employer should be vicariously liable for the acts of independent
contractors. Given the majority’s clear statement that this principle is ‘too deeply
rooted to be pulled out’, it seems unlikely that there will be a litigant brave enough
to provide the High Court with another opportunity to consider this question in the
near future. In the meantime, a broad and flexible approach to distinguishing
between employees and independent contractors, informed by the policy rationales
for imposing vicarious liability, is the best way of ensuring that employers are not
able to escape liability when they are the most appropriate person to bear the cost.